Six myths. hoaxes, misdirection and just plain silliness about Money and Banking. Be sure to read #5 and #6 below. They are very important.

1) A COMMON MYTH BEING SPREAD EVERY DAY -- even by the smartest money reformers.
Here is a quote from Ellen Brown who wrote "Web Of Debt" and who might
be the most respected writer today on Money and Banking. " ...Among
other problems with this system of money creation is that banks create
the principal but not the interest necessary to pay back their loans
(emphasis added by mrc); and that is where the Ponzi scheme
comes in. Since loans from the Federal Reserve or commercial banks are
the only source of new money in the economy, additional borrowers must
continually be found to take out new loans to expand the money supply,
in order to pay the interest creamed off by the bankers. New sources of
debt are fanned into "bubbles" (rapidly rising asset prices), which
expand until they "pop," when new bubbles are devised, until no more
borrowers can be found and the pyramid finally collapses. ..."

Analysis by (mrc) -- This idea of banks creating
money for loans -- but not creating money to pay the interest is a
widespread myth that is destroyed athttp://www.michaeljournal.org/myth.htm

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If a careless reader reads the first part of the link on the
preceding link (before the myth is exposed), he or she may very well
believe that such a lending practice may cause serious problems.
Evidently lots of people have done just that -- as has, evidently, Ellen
Brown in the quotation above.

We just Googled "create the principal but not the interest" and got 93 hits -- Ellen's link was #1.

Lots of people would obviously be led astray if they only read Ellen's article. (mrc)

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Analysis continued -- Expecting the government to (a) create money and put it into our economic system as a loan and (b)also create the interest to pay off that loan
is a little goofy. That is analogous to a graduating college student
saying to his father -- "Thanks for giving me this new car, Dad, but
you forgot to give me enough money to pay for the gas I will need." It
is not up the father to give the student money for the gas and it is
not up to the government to give someone a loan and give that someone
the money to pay the interest on the loan. It is up to the debtor to work and make the money to pay the interest.

4) "Bank Runs are still a problem " No
they are not --- converting to Paper Money basically stopped the
problems that existed previously when hardly anyone trusted paper
money. Because our paper money is backed by (a) Legal Tender laws, (b) all the wealth available to be purchased in almost any market in the world, and (c) our courts and police who will enforce our laws.

5) The biggest myth of all?"The United States (the richest country that has ever existed) has to borrow money because we regularly spend more than we take in."

That is totally absurd -- we have the Sovereign Right to create whatever money we think we need to run our country efficiently. Creating money does not cause inflation
if the total money in existence does not exceed the total wealth of the
country -- and that can never happen if the newly created money is put
into the economy so as to create more wealth than the dollar value of
that newly created money. We simply have to invest wisely in
wealth-producing assets.

6) This one is almost unbelievably silly -- "It is a good idea for banks to sell off their mortgages
to Fannie Mae and Freddie Mac -- so the banks can use that money to
make new loans"

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(That was why the government set up those two "F
groups"). This was, in our opinion, the single most important blunder
made by Congress in my lifetime. That action put those mortgages into
the public financial marketplace where they were they were blanched,
branched and tranched into strange financial instruments which were
sold worldwide to people who knew not what they were. Thus the
financial meltdown started with the monetary fuel from these mortgages
and the spark of greed from financial types who spun straw from gold.
See #4 at
< http://www.primeronmoney.com/six-serious-defects-in-our-money-and-banking-system.html >

There
is no need to funnel money to banks -- they have the right to make
whatever money they need to make prudent and sensible loans -- it is
all part of our Sovereign Right to create whatever money we need.

1.
Who has the right to create money in the United States? Under the
Constitution, it is the right and duty of Congress to create money. It
is left entirely to Congress. ... 2. To whom has the Congress
delegated this money creating right? (in the 1913 "Federal Reserve Act
- mrc) To the banking system, that is, to the Federal Reserve System
and to the commercial banks of the country. ...
3. Why is the money-creating power important? Because, by creating
money, banks provide the exchange media which the economy needs to
prosper and grow. Since the growth and proper functioning of the U.S.
economy require increasing amounts of money over the years, those who
control the amount of money exercise great power over business
activity, the incomes people earn and economic strength.
4. Why was the banking system given the right to create money? The
reasons are mainly historical. Still the banks do perform a service in
creating money. For once the money and credit is created someone must
decide whom to give the money and for what purposes. This the banks do.
And bank earnings are the return for wise and proper placing of the
money supply.

Retired engineer, product and business developer, inventor (six patents). Currently (a) trying to completely understand our money and banking systems and (b) planning to pass that information to the American public.
Photo is ca. (more...)